Contents
Judgment of the Court (Ninth Chamber)27 February 2025note(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Article 273 — Measures to ensure the correct collection of VAT — VAT debt of a taxable person — National legislation which provides for the joint and several liability of the former chairperson of the management board of the taxable person — Participation of the former chairperson of the management board in the proceedings establishing the existence of a VAT debt — Proceedings to invoke joint and several liability — Calling into question of the VAT debt — Rights of the defence — Proportionality)In Case C‑277/24 [Adjaknote],REQUEST for a preliminary ruling under Article 267 TFEU from the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), made by decision of 25 January 2024, received at the Court on 22 April 2024, in the proceedingsM.B.vDyrektor Izby Administracji Skarbowej we Wrocławiu,THE COURT (Ninth Chamber),composed of N. Jääskinen, President of the Chamber, A. Arabadjiev and R. Frendo (Rapporteur), Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Dyrektor Izby Administracji Skarbowej we Wrocławiu, by E. Chojnacki and B. Rogowska-Rajda,– the Polish Government, by B. Majczyna and D. Lutostańska, acting as Agents,– the Czech Government, by L. Březinová, M. Smolek and J. Vláčil, acting as Agents,– the European Commission, by M. Herold and B. Sasinowska, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Articles 205 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’), read in conjunction with Article 2 TEU, Articles 17, 41 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), the principle of proportionality, the right to a fair hearing and the rights of the defence.
2The request has been made in proceedings between M.B. and the Dyrektor Izby Administracji Skarbowej we Wrocławiu (Director of the Tax Administration Chamber, Wrocław, Poland) (‘the DIAS’) concerning M.B.’s participation in the administrative procedure seeking to determine the existence of a value added tax (VAT) debt of a company of which M.B. had chaired the management board.
Legal context
European Union law
3Article 193 of the VAT Directive provides:‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202.’
4Article 205 of that directive states:‘In the situations referred to in Articles 193 to 200 and Articles 202, 203 and 204, Member States may provide that a person other than the person liable for payment of VAT is to be held jointly and severally liable for payment of VAT.’
5The first subparagraph of Article 273 of that directive is worded as follows:‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.’
Polish law
6The ustawa – Ordynacja podatkowa (Law establishing the tax code) of 29 August 1997, in the version applicable to the dispute in the main proceedings (Dz. U. of 2023, item 2383) (‘the Tax Code’), provides in Article 107:1. In the cases and to the extent provided for in this chapter, third parties shall also be jointly and severally liable with the taxable person, in respect of their entire assets, for the taxable person’s tax arrears.…2.Unless otherwise provided, third parties shall also be liable:…(3) in respect of advances on input [VAT] not repaid within the periods prescribed and interest on those advances;…’
7Article 108(1) of the Tax Code provides:‘The tax authority shall adopt a decision on the tax liability of a third party.’
8Under Article 116 of that code:1.The members of the management board of a limited liability company, a limited liability company being formed, a simplified limited company, a simplified limited company being formed, a public limited company or a public limited company being formed shall be jointly and severally liable for their entire assets in respect of the tax arrears of those companies, where the compulsory enforcement against the assets of the company has proved unsuccessful in whole or in part and where the member of the management board:(1) has not demonstrated that:(a) an application for a declaration of insolvency has been filed …;(b) the absence of an application for a declaration of insolvency is not due to fault on his or her part;(2) did not identify the assets of the company, the execution of which would make it possible largely to cover the tax arrears of the company.…2. The liability of the members of the management board shall extend to the tax arrears in respect of the outstanding debts during the performance of their duties and to arrears … arising during the performance of those duties.…4. The provisions of paragraphs 1 to 3 shall also apply to the former member of the management board and to the former representative or member of the company being formed.…’
9Article 133(1) of that code states:‘The parties to the tax proceedings shall be the taxable person, the payer, the tax collector or their successor in title and the third party referred to in Articles 110 to 117c who, on account of their legal interest, request an action on the part of the tax authority, the action of which relates to or concerns the legal interest.’
The dispute in the main proceedings and the question referred for a preliminary ruling
10M.B. was the chairperson of the management board of company B. sp z o.o. from August 2014 to January 2018.
11That company was the subject of a tax inspection procedure (‘the tax procedure at issue’) by the Naczelnik Urzędu Skarbowego Wrocław-Stare Miasto (Head of the Tax Authority, Wrocław-Stare Miasto, Poland) (‘the NUS’), concerning the VAT returns relating to the period from June to October 2016.
12On 22 August 2022, M.B. submitted an application to the NUS seeking the status of a party to the tax procedure at issue and access to the file of the NUS, on the ground that she had chaired the management board of company B.. By an order of 12 September 2022, the NUS rejected that application.
13Having received a claim made by M.B., the DIAS, by an order of 27 October 2022 (‘the DIAS order’), annulled the order of the NUS of 12 September 2022 in its entirety and closed the procedure. In that order, the DIAS stated that the status of a party to a tax procedure depends on the assessment of the competent authorities. In the opinion of the DIAS, M.B. does not fall within any of the categories of entities set out in Article 133 of the Tax Code. In those circumstances, the DIAS considered that there was no legal basis on which the NUS could base its order. That code does not provide that the question of whether or not a given person is to be granted the status of a party to an ongoing tax procedure is to be determined by an order or any other act.
14On 6 December 2022, M.B. brought an action before the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), which is the referring court, seeking annulment of the DIAS order.
15In support of her action, M.B. submits, first of all, that the DIAS misinterpreted the provisions of national law by considering that she had no legal interest, within the meaning of Article 133 of the Tax Code, in applying for the status of a party to the tax procedure brought against company B.. Next, M.B. states that, since she was the sole member of the management board of that company during the period that is the subject of the tax proceedings at issue, she has the greatest knowledge of the activity of that company, which is crucial for the purposes of those proceedings. The ad hoc hearing of M.B. as a witness by the NUS is neither sufficient nor exhaustive. Lastly, M.B. states that her application for the status of a party to that tax procedure is justified on the ground that any unpaid debts of company B. will affect her as a natural person.
16In the request for a preliminary ruling, the referring court states, in the first place, that, according to the consistent practice of the Polish tax authority, confirmed by the case-law of the national courts relating to Articles 116 and 133 of the Tax Code, invoking the joint and several liability of third parties, such as a member or a former member of the management board of a company, results from two separate sets of proceedings:– proceedings to determine the amount of the tax debt (‘the tax proceedings’), to which only the person subject to the tax at issue in those proceedings is a party;– an action for joint and several liability of third parties (‘the joint and several liability proceedings’) where the taxable person whose tax debt was determined as a result of the tax proceedings fails to comply with its tax obligations.
17In that regard, the referring court states that, according to national practice, a third party such as a former member of the management board of a company with a tax debt does not have a legal interest, within the meaning of Article 133 of the Tax Code, in being a party to the tax proceedings concerning that company. That third party could only be a party to the joint and several liability proceedings.
18That court states, however, that neither the provisions of the Tax Code nor national practice make provision for that third party to challenge the amount of the tax debt established as a result of the tax proceedings, in the context of the joint and several liability proceedings. The main purpose of those proceedings is to determine whether the conditions for the liability of the third party are satisfied.
19In the second place, the referring court expresses doubts as to the compatibility of the national practice at issue with EU law.
20That court states that, in the present case, the dispute concerns, in essence, the procedural guarantees which should be granted to a third party, in the context of proceedings to determine the amount of a company’s tax debt, on account of the potential obligation for that third party to cover, with that third party’s private assets, the VAT debt of that company.
21The referring court states that, it is true that a system of joint and several liability of a third party in respect of a company’s tax obligations contributes to ensuring the correct collection of VAT, within the meaning of Article 273 of the VAT Directive, read in the light of Article 325(1) TFEU. However, relying, inter alia, on the judgment of 8 May 2019, EN.SA. (C‑712/17, EU:C:2019:374, paragraphs 38 and 39), that court states that the discretion that Article 273 of the VAT Directive confers on the Member States as to the means of attaining the objectives pursued by that article must be exercised in accordance with EU law, in particular its general principles, including the principle of proportionality.
22In that regard, that court states that it is apparent, inter alia, from the judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ (C‑1/21, EU:C:2022:788), that Article 273 of the VAT Directive and the principle of proportionality must be interpreted as not precluding national legislation which provides for, where certain circumstances are present, a system of joint and several liability for a legal person’s VAT debts. Nevertheless, in accordance with that judgment, the tax authority should, in the context of proceedings relating to the joint and several liability of a third party, examine the circumstances related to the contribution of that third party to the tax debt, or to another reduction in the State budget in respect of VAT. According to that court, a national practice excluding the participation of that third party in the proceedings seeking to determine the amount of the tax debt does not meet that requirement.
23The lack of participation in the tax proceedings by a third party capable of being the subject of joint and several liability proceedings could result in that third party not being able to call into question any erroneous findings made by the tax authority, since that tax authority is bound by the final decision adopted with regard to the company concerned by the tax proceedings.
24Furthermore, the referring court states that the fact that that third party may be heard as a witness in the tax proceedings does not permit the inference that he or she has the procedural guarantees specific to a party to those proceedings.
25Thus, according to that court, the fact that a third party who may be held jointly and severally liable cannot participate in the tax proceedings, seeking to determine the amount of the tax debt, raises questions as to the compliance with the rule of law, referred to in Article 2 TEU, the right to property, protected by Article 17 of the Charter, the principle of good administration, the rights of the defence and the right to effective judicial protection, guaranteed in particular in Articles 41 and 47 of the Charter, and the principle of proportionality.
26In that context, the referring court refers, inter alia, to the judgment of 16 October 2019, Glencore Agriculture Hungary (C‑189/18, EU:C:2019:861). According to that court, since it follows from that judgment that it is necessary for the individual who is the subject of a tax procedure to be able to acquaint himself or herself with the material gathered in the context of related proceedings, it must be held that the provisions of the VAT Directive, the principle of respect for the rights of the defence and Article 47 of the Charter do not preclude a third party being held jointly and severally liable for the debts of a company from having the status of a party to the tax proceedings brought against that company, which implies that that third party is entitled to acquaint himself or herself with the evidence on the basis of which the tax authority determines the amount of the tax debt that that third party will ultimately be likely to bear.
27In those circumstances, the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Are Articles 205 and 273 of the [VAT Directive] in conjunction with Article 2 of the Treaty on European Union … (the rule of law, respect for human rights), as well as Article 17 of [the Charter] (the right to property), Article 41 thereof (the right to good administration) and Article 47 thereof (the right to an effective remedy and the right to a fair trial) and (as guaranteed under EU law) the principle of proportionality, the right to a fair hearing and the rights of the defence, to be interpreted as precluding national legislation and the national practice based thereon which deny a natural person (a member of the Management Board of a legal person) – who may be jointly and severally liable for the VAT debt of the legal person with all his or her private assets – the right to participate actively in the procedure for determining that legal person’s tax debt in the form of a final decision of the tax authority, while at the same time that natural person, in separate proceedings seeking to determine his or her joint and several liability for the legal person’s VAT debt, is deprived of an adequate means of effectively challenging the findings and assessments which have been made previously concerning the existence or the amount of that legal person’s tax debt and which are set out in the final decision of the tax authority issued previously without the participation of that natural person, which decision therefore constitutes a precedent in those proceedings under a national provision confirmed by national practice?’
Admissibility of the request for a preliminary ruling
28In its written observations, the DIAS submits that, under Polish law, any decision relating to the liability of a third party is excluded where a period of more than five years has elapsed since the end of the calendar year during which the tax arrears arose. In the case in the main proceedings, that period expired at the end of 2021, with the result that the right to bring joint and several liability proceedings is time-barred. Therefore, the Court’s answer to the present request for a preliminary ruling has no bearing on the liability of M.B., as a former member of the management board of company B., with regard to the tax arrears of company B..
29In that regard, admittedly, it is apparent from both the wording and the scheme of Article 267 TFEU that the preliminary ruling procedure assumes, in particular, that a case is in fact pending before the national courts, since the preliminary ruling sought must be ‘necessary’ in order to enable the referring court to ‘give judgment’ in the case before it. The justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute (judgment of 25 June 2020, Ministerio Fiscal (Authority likely to receive an application for international protection), C‑36/20 PPU, EU:C:2020:495, paragraph 48 and the case-law cited).
30However, it is solely for the national court before which the dispute has been brought and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case in the main proceedings, the relevance of the question which it submits to the Court. Consequently, where the question submitted concerns the interpretation or the validity of a rule of EU law, the Court is, in principle, bound to give a ruling. It follows that questions referred for a preliminary ruling concerning EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 22 November 2022, Staatssecretaris van Justitie en Veiligheid (Removal – Medicinal cannabis), C‑69/21, EU:C:2022:913, paragraph 41 and the case-law cited).
31In the present case, it is common ground that M.B.’s action has been brought before the referring court seeking annulment of the DIAS order, by which the DIAS rejected M.B.’s request that she be granted the status of a party to the tax proceedings concerning company B., which is, according to that court, still ongoing. Similarly, the referring court considers that the Court’s answer to the present request for a preliminary ruling is necessary to be able specifically to resolve the dispute concerning that action.
32Therefore, the present request for a preliminary ruling is admissible.
Consideration of the question referred
Preliminary observations
33According to settled case-law, in the procedure laid down by Article 267 TFEU, providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the question referred to it. The Court may also find it necessary to consider provisions of EU law which the national court has not referred to in its questions (judgment of 16 May 2019, Plessers, C‑509/17, EU:C:2019:424, paragraph 32 and the case-law cited).
34As is apparent from paragraph 27 above, the question referred for a preliminary ruling concerns the interpretation of Articles 205 and 273 of the VAT Directive, read in conjunction with Article 2 TEU, Articles 17, 41 and 47 of the Charter, the principle of proportionality, the right to a fair hearing and the rights of the defence.
35In the first place, as regards the VAT Directive, it should be borne in mind that, as set out in Article 205 thereof, in the situations referred to in Articles 193 to 200 and 202 to 204 of that directive, Member States may provide that a person other than the person liable for payment of VAT is to be held jointly and severally liable for payment of VAT.
36Articles 193 to 200 and 202 to 204 of the VAT Directive determine the persons liable for payment of VAT, in accordance with the purpose of Section 1 of Chapter 1 of Title XI of that directive, headed ‘Persons liable for payment of VAT to the tax authorities’, of which those provisions form part. Although Article 193 of that directive provides, as the basic rule, that VAT is payable by any taxable person carrying out a taxable supply of goods or services, the wording of that article states that other persons may or shall be liable for payment of VAT in the situations referred to in Articles 194 to 199b and 202 of that directive (see, to that effect, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 48 and the case-law cited).
37It is apparent from the context formed by Articles 193 to 205 of the VAT Directive that Article 205 of that directive is part of a set of provisions aimed at identifying the person liable for payment of VAT in various situations (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 49 and the case-law cited).
38In principle, therefore, Article 205 of the VAT Directive allows Member States to adopt, for the efficient collection of VAT, measures pursuant to which a person other than the person normally liable for that tax under Articles 193 to 200 and 202 to 204 of that directive is jointly and severally liable for payment of that tax (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 50 and the case-law cited).
39In the present case, it is not apparent from the request for a preliminary ruling that the system of joint and several liability provided for in Poland in Article 116 of the Tax Code is intended to designate a person liable for payment of the tax on one or more specific taxable transactions, within the meaning of Articles 193 and 205 of the VAT Directive, read together. Under that system, the members or former members of the management board of a company may, under certain conditions, be regarded as jointly and severally liable for all or part of the VAT debts of that company, without those debts being related to one or more specific taxable transactions.
40Consequently, it does not appear that Article 205 of the VAT Directive is applicable in the circumstances of the dispute in the main proceedings (see, to that effect and by analogy, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraphs 51, 52 and 54).
41In the second place, as regards the principles and fundamental rights referred to by the referring court, it must be stated that Article 41 of the Charter, relating to the right to good administration, is not applicable in the context of the dispute in the main proceedings, since it is addressed not to the Member States but solely to the institutions, bodies, offices and agencies of the European Union (judgment of 17 July 2014, YS and Others, C‑141/12 and C‑372/12, EU:C:2014:2081, paragraph 67). It is true, as the referring court states, that the right to good administration, enshrined in that provision, reflects a general principle of EU law (judgment of 17 July 2014, YS and Others, C‑141/12 and C‑372/12, EU:C:2014:2081, paragraph 68). However, it does not appear necessary, in the present case, to invoke the right to good administration, as a general principle of EU law, from a different perspective to that of the right to be heard and the right to have access to the file, which, in accordance with the case-law, form part of the rights of the defence (judgment of 10 September 2013, G. and R., C‑383/13 PPU, EU:C:2013:533, paragraph 32; see, to that effect, judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraphs 41 and 51), also referred to by the question referred.
42Similarly, having regard to the administrative nature of the tax proceedings and, moreover, the joint and several liability proceedings, Article 47 of the Charter, relating to the right to an effective remedy and to a fair trial, is no more relevant than the right to effective judicial protection (see, to that effect, judgment of 1 December 2022, Aquila Part Prod Com, C‑512/21, EU:C:2022:950, paragraph 59).
43In addition, since, at the stage of the tax proceedings initiated with regard to the company that is likely to have a VAT debt, the private assets of the members of the management board of that company are not capable of being affected, it is not necessary to take into consideration Article 17 of the Charter, relating to the right to property.
44Furthermore, although the referring court also refers to Article 2 TEU, which sets out the values on which the European Union is founded, there is nothing in the request for a preliminary ruling to permit the inference that that court seeks the interpretation of that article independently of the fundamental rights and principles to which it refers in its question.
45Accordingly, the present question referred for a preliminary ruling must be reformulated to the effect that, by that question, the referring court asks, in essence, whether Article 273 of the VAT Directive, read in conjunction with Article 325(1) TFEU, the rights of the defence and the principle of proportionality, must be interpreted as precluding national legislation and practice under which a third party who may be held jointly and severally liable for the tax debt of a legal person cannot be a party to the tax proceedings brought against that legal person to establish the tax debt of that legal person, and is not given any adequate means of challenging the findings and assessments as to the existence or the amount of that tax debt in the context of the joint and several liability proceedings.
Substance
46In accordance with the first paragraph of Article 273 of Directive 2006/112, Member States may impose obligations, other than those provided for by that directive, if they consider such obligations necessary to ensure the correct collection of VAT and to prevent evasion (judgments of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 49, and of 11 January 2024, Global Ink Trade, C‑537/22, EU:C:2024:6, paragraph 41).
47In addition, Article 325(1) TFEU requires the Member States to counter fraud and any other illegal activities affecting the financial interests of the European Union through effective and deterrent measures.
48It follows, inter alia, from the abovementioned provisions that the Member States are required to take all legislative and administrative measures appropriate for ensuring collection of all VAT due on their territory and for preventing tax evasion (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 60 and the case-law cited).
49A system of joint and several liability such as that established by Article 116 of the Tax Code contributes to the collection of amounts of VAT which have not been paid by a taxable legal person within the mandatory time limits laid down by the VAT Directive. That system helps therefore to ensure the correct collection of VAT within the meaning of Article 273 of that directive, in accordance with the obligation laid down in Article 325(1) TFEU (see, to that effect and by analogy, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 61).
50It follows from the case-law that, outside the limits laid down therein, Article 273 of the VAT Directive does not specify either the conditions or the obligations which the Member States may impose. Article 273 therefore gives the Member States a margin of discretion with regard to the means of attaining the objectives of ensuring the collection of all the VAT and for preventing tax evasion. Nevertheless, the Member States must exercise that power in accordance with EU law and its general principles (see, to that effect, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraphs 69 and 72).
51In that regard, it should be borne in mind that, according to a consistent body of case-law, respect for the rights of the defence is a general principle of EU law. That principle applies where the authorities are minded to adopt a measure which will adversely affect an individual. In accordance with that principle, the addressees of decisions which significantly affect their interests must be placed in a position in which they can effectively make known their views as regards the information on which the authorities intend to base their decision. The authorities of the Member States are subject to that obligation when they take decisions which come within the scope of EU law, even though the EU law applicable does not expressly provide for such a procedural requirement (judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraph 39 and the case-law cited).
52As is apparent from paragraph 41 above, the rights of the defence include the right to be heard and the right of access to the file.
53However, the principle of respect for the rights of the defence is not an unfettered prerogative but may be restricted, provided that the restrictions in fact correspond to objectives of public interest pursued by the measure in question and do not constitute, in the light of the objectives pursued, a disproportionate and intolerable interference which impairs the very substance of the rights thus guaranteed (judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraph 43 and the case-law cited).
54Those objectives include, inter alia, in the context of tax proceedings, the protection of the requirements of confidentiality or business secrecy (see, to that effect, judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraph 55).
55Furthermore, it follows from the case-law that, when reviewing whether the rights of the defence were respected in the context of related administrative procedures, account must also be taken of legal certainty, which is also a general principle of EU law. Since the finality of an administrative decision contributes to legal certainty, in principle, EU law does not require that administrative bodies be placed under an obligation to reopen an administrative decision which has become final in that way (see, to that effect, judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraphs 45 and 46).
56That being said, the finality of an administrative decision cannot justify an impairment of the very essence of the rights of the defence. Thus, it cannot be accepted that, because of the finality of decisions taken at the close of related administrative procedures, the tax authority is relieved of the obligation to disclose to the taxable person the evidence, including that originating in those procedures, on the basis of which they intend to take a decision in that regard, and that that taxable person is thus deprived of the right effectively to call into question, during the procedure of which he or she is the subject, those findings of fact and those legal classifications (see, to that effect, judgment of 16 October 2019, Glencore Agriculture Hungary, C‑189/18, EU:C:2019:861, paragraphs 47 and 49).
57In the present case, as a result of the tax proceedings, the Polish tax authority will determine the existence and the amount of the VAT debt of company B. and, if that company does not repay its debt and/or the enforcement of that debt is unsuccessful, M.B. may be subject to joint and several liability proceedings.
58A decision which, as a result of the latter proceedings, finds M.B. jointly and severally liable for the tax debt of company B., as previously determined in the context of the tax proceedings, would adversely affect M.B.
59Consequently, in the situation referred to in the preceding paragraph, the principles set out in paragraph 56 above require the Polish tax authority to respect the rights of the defence of the individual in joint and several liability proceedings initiated following tax proceedings in which a finding was made of a tax debt, which could not, in whole or in part, be recovered from the person who is taxable for VAT purposes.
60As is apparent from paragraphs 18 and 23 above, in the present case, according to the findings of the referring court, the joint and several liability proceedings do not appear to call into question the amount of the debt, since the purpose of the proceedings appears to be confined to establishing whether the conditions arising from Article 116 of the Tax Code are present in order for the tax debt previously established as a result of the tax proceedings to be claimed from a third party. Therefore, joint and several liability proceedings which take place in such circumstances could undermine the very essence of the rights of the defence of that third party.
61That being said, it must be stated that, at the stage of the tax proceedings brought against a company, there is only a possibility that joint and several liability proceedings may be initiated at a later stage against a third party and that, as a result of those joint and several liability proceedings, a decision will be adopted which adversely affects that third party or significantly affects that third party’s interests.
62By contrast, granting that third party the right to participate in the tax proceedings could, in principle, jeopardise the confidentiality of certain information or prolong the duration of those proceedings, thus undermining the public interest in ensuring the efficient collection of VAT.
63In that context, it should be borne in mind that, under the principle of proportionality, Member States must employ means which, whilst enabling them effectively to attain the objectives pursued by their domestic laws, cause the least possible detriment to the objectives and principles laid down by the relevant EU legislation. Therefore, while it is legitimate for the measures adopted by the Member States to seek to preserve the rights of the public exchequer as effectively as possible, they must not go further than is necessary for that purpose (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 73 and the case-law cited).
64However, denying a third party who may be held jointly and severally liable for the tax debt of a legal person the right to participate in the tax proceedings brought against that legal person does not go further than is necessary to preserve the rights of the public exchequer as effectively as possible. On the other hand, that limit would be exceeded if the very substance of the rights of the defence of that third party were adversely affected in the context of any joint and several liability proceedings brought against that third party.
65In the light of the foregoing considerations, the answer to the question referred for a preliminary ruling is that Article 273 of the VAT Directive, read in conjunction with Article 325(1) TFEU, the rights of the defence and the principle of proportionality, must be interpreted as not precluding national legislation and practice under which a third party who may be held jointly and severally liable for the tax debt of a legal person cannot be a party to the tax proceedings brought against that legal person to establish the tax debt of that legal person, without prejudice to the need for that third party, during any joint and several liability proceedings brought against that third party, to be able effectively to call into question the findings of fact and the legal classifications made by the tax authority in the context of the tax proceedings, and to have access to the file of the tax authority, in accordance with the rights of that person or of other third parties.
Costs
66Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Ninth Chamber) hereby rules: Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with Article 325(1) TFEU, the rights of the defence and the principle of proportionality, must be interpreted as not precluding national legislation and practice under which a third party who may be held jointly and severally liable for the tax debt of a legal person cannot be a party to the proceedings brought against that legal person to establish the tax debt of that legal person, without prejudice to the need for that third party, during any joint and several liability proceedings brought against that third party, to be able effectively to call into question the findings of fact and the legal classifications made by the tax authority in the context of the first set of proceedings, and to have access to the file of the tax authority, in accordance with the rights of that person or of other third parties.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.